SBA head McMahon sees businesses held back by lack of loans, workers

Six months into her tenure as head of the Small Business Administration, Linda McMahon sees a split among small-business owners: They are increasingly optimistic, but many are held back by their inability to get loans or find the right workers for jobs.

"Entrepreneurs are willing again to be bigger risk-takers than they have been over the past eight years," McMahon said last week. But there are lingering effects of the recession, she said, and "I think there is still a caution."

McMahon's observations matched business owners' self-assessments in surveys, including those released by Pepperdine University's Graziadio School of Business and Management and Dun & Bradstreet Corp., and by the National Federation of Independent Business.

She also named some of the other stumbling blocks many business owners have cited: regulations, taxes and the cost of health care, all issues President Trump pledged to address.

McMahon, who has spent the last six months traveling to events such as forums and roundtables, has a background in business. She and husband Vince founded and built World Wrestling Entertainment Inc. She resigned as CEO in 2009 and last year co-founded Women's Leadership LIVE, which promotes opportunities for women in business and public service.

Although small businesses are hiring more now than during the recession, many don't want to add staff unless they have enough new business to justify expanding payrolls.

But some want to hire and can't. McMahon echoed the feeling of many: They can't find workers with the skills to match their companies' needs.

Jobs for skilled workers such as carpenters, electricians and welders are going unfilled, as are technology positions like computer code writers, McMahon said. Companies that provide services like heating, ventilation and air conditioning are struggling to find workers to install and repair equipment.

"There's a lack of interest, or there is not a trained workforce to come in," McMahon said, adding that at many companies, skilled workers are ages 50 to 55. Owners are telling her, "I don't have that next group that's going to take over these jobs."

Another factor is an unemployment rate that's at a 16-year-low of 4.3 percent - there are fewer people looking for jobs. Workers may also be harder to come by if legislation to restrict immigration, a bill backed by Trump, becomes law.

Some solutions are coming from companies ranging from large ones like Boeing to small manufacturers that have been donating money, equipment or expertise to community college and high school students to train them for such jobs, McMahon said.

"When you get those skills, you can start your own business," she said.

She pointed to an executive order Trump signed in June that roughly doubled, to $200 million, the taxpayer money allocated to learn-and-earn programs under a grant system called ApprenticeshipUSA. The money was to come from existing job-training programs rather than the proposed federal budget, which would slash funding for the Labor Department's training programs by a third.

Small businesses, particularly the youngest, tiniest and those owned by women and minorities, have historically had a hard time getting loans.

Lending to small businesses has improved since the worst days of the recession. The Federal Deposit Insurance Corp. counted $331 billion in commercial and industrial bank loans under $1 million as of Dec. 31, the most recent figures available.

But the Pepperdine-Dun & Bradstreet survey found that only about a third of companies with revenue under $5 million were successful in getting bank loans in the first four months of the year.

McMahon acknowledged that banks need to better serve the needs of women and minority business owners. The administration is "making sure that our lenders understand what our expectations are relative to having women and minorities on equal footing when they come in" to apply for loans, she said.